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Connecticut state budget (2010-2011)

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Connecticut's two-year, $37.6 billion state budget was adopted in September 2009 and lawmakers intentionally left a $1.3 billion shortfall in the second fiscal year.[1] FY2011 was the second year of the state's biennial budget, with the budget for FY2011 amounting to $19.1 billion.[2]

Since 1980, state spending had risen from $4,400 per household to $10,000 per household in 2010, an increase of 227%.[3]

Connecticut had a total state debt of $65,213,378,749 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap.[4]

2011 State spending & deficit in billions[5]
Total spending Pension Healthcare Education Welfare Protection Transport Debt
$26.1 $2.9 $7.2 $4.0 $3.5 $1.8 $2.0 $30.2
2011 Local spending & deficit in billions[5]
Total spending Pension Healthcare Education Welfare Protection Transport Deficit
$21.3 $0.5 $0.1 $8.4 $0.8 $1.3 $0.9 $10

State Budget for FY2011

Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government here.

In Dec. 2010, the National Conference of State Legislatures said that the state faced a midyear shortfall of $86 million, which represents 0.5% of the FY2011 state budget.[6]

Connecticut ended FY2011 with a $237 million surplus according to unaudited figures released in Sept. 2011. State Comptroller Kevin Lembo said that the state avoided a $1 billion deficit by using "temporary financial fixes."[7] $14.5 million of the surplus was to go toward future retiree health care — a payment he said the state was contractually obligated to make — and to start paying $916 million in "economic recovery notes" the state issued in 2009.[7]

State employees were paid $250 million in overtime in FY2011, and state officials said an estimated 2,000 state workers — out of a workforce of more than 45,000 — made overtime amounting to at least half their regular pay during a one-month period.[8]

Comptroller Lembo announced in early May 2011 that the state's revenues increased by $414.9 million for the month of April, higher than anticipated. He projected a state budget surplus of $509.6 million for FY2011 fiscal year which ended on June 30, 2011, and recommended that the surplus be used to pay off the state’s debt and to replenish the Rainy Day Fund.[9]

State Treasurer Denise L. Nappier said in Dec. 2010 that revenues from unclaimed properties would reach $92 million in FY2011, $42 million above the level originally projected in the $19.01 billion state budget.[10]


Gov. Rell signed the $19 billion FY2011 budget, Senate Bill 494, on May 7, 2010, two days after the legislature adjourned.[11] The budget cuts spending by state agencies by $163.4 million and lowers interest expenses by more than 50 percent: $133.5 million over eight years versus $300.6 million over 10 years.[11] Under the budget agreement, a plan to borrow $989 million through Economic Recovery Revenue Bonds replaces the $1.3 billion in “securitization” called for in last year's budget, which became law without Governor Rell’s signature. These bonds had shorter terms (eight years versus 10 years) and lower interest rates (3 percent versus 4 percent), resulting in a net savings.[11] Such borrowing balances the budget, and leaves a projected $3.4 billion deficit for 2011-12.[12] The plan uses 34% of an existing charge that appears on monthly electric bills that was set to expire to repay the bonds. Instead of being the charge disappearing from customer's bills, the average household's charge would drop from $7.50 to $2.50 per month.[11][13]

The debt per capita was $4,859, the highest in the nation at the time.[14]

Federal Stimulus Funds

Although the state received less than lawmakers had hoped for from the August 2010 federal stimulus, officials said that the federal funds would enable the state to avoid a deficit.[15] The state's portion of the August 2010 state bailout translated into approximately $110 million for education and $199 million for Medicaid.[15] The governor's office said that the state would receive $193.4 million less in federal Medicaid and education funding than it had anticipated.[2]

State Budget FY2010

According to State comptroller Nancy Wyman, the projected FY2010 budget surplus was now at $393.3 million.[16]

Connecticut’s General Fund budget for FY 2010 was $17.375 billion and $17.591 billion for FY 2011. The budget package includes transfers of $1 billion in FY 10 and $319.7 million in FY 11 from the Budget Reserve Fund (BRF) to the resources of the General Fund.[17]

On April 1, 2010, State Comptroller Nancy Wyman informed Gov. Jodi Rell that the state's Office of Policy and Management (OPM) had projected a Fiscal Year 2010 General Fund budget deficit of $356.5 million but that she projected the deficit to be $371 million.[18] Comptroller Wyman cited income tax projections as the reason for the difference.[18] She also projected that General Fund revenues would fall $357.4 million short of budget projections, with the two largest shortfalls in the categories of income tax, which would be $222.2 million short, and sales tax, which was short of budget projections by $90.6 million.[18]

Comptroller Wyman stated that the Governor's deficit mitigation plan had reduced the deficit by nearly $150 million.[18] The first component defers a $100 million contribution to the State Employees’ Retirement System. This deferral shifts the payment obligation forward requiring higher contribution levels in future fiscal years. The second item was $47.4 million in Medicaid savings due to a change in the administration of federal stimulus money that would result in lower state payments or “claw backs” relative to Medicare Part D.[18]

Comptroller Wyman stated that much of that governor's first plan was not implemented and the current deficit triggers the requirement for a second mitigation plan.[18] Gov. Rell's plan included a 3.25% hospital tax as well as more than $170 million in spending cuts, many of which impact education and social services programs.[18] It was considered by lawmakers.[19]

Also see Connecticut state budget (2008-2009) for more information.

Budget background

Connecticut’s General Fund had surpluses in the amount of $302.2 million in FY 04; $363.9 million in FY 05; $446.5 million in FY 06; and $269.2 million in FY 07, each contributing toward a total Budget Reserve Fund (BRF) balance of $1,381.8 million.

The Connecticut Legislature in 2009 passed some cost savings measures that included:[20]

  • Reduction in personnel costs by $701.9 million over 3 years
  • Salary wage freezes
  • Mandatory furlough days
  • Employee retirement incentive
  • Increased employee health insurance contributions
  • New employee contributions to fund retiree health care

The Connecticut General Assembly meets annually, but sets its budget cycle biennially. Once the state's agencies submit their budget requests for the upcoming biennium the Governor reviews, revises and make any necessary additions before submitting the budget recommendation to the legislature on the first session day following February 14th in odd-numbered years. During even number years the Governor submits a report to the legislature on the status of the enacted budget along with any recommendations for revisions and adjustments.[21]

Accounting principles

See also:Connecticut government accounting principles

Hours after being sworn into office, Governor Dannel Malloy signed an executive order mandating that the state transition into Generally Accepted Accounting Principles.[22]

The Connecticut Auditors of Public Accounts was under the direction of 2 state auditors appointed by the State Legislature; having 2 auditors was unique among the states. Their audit reports were published online.[23][24]

Credit Rating Fitch Moody's S&P
Connecticut[25] AA Aa3 AA

Economic Stimulus Package

Connecticut was expected to receive approximately $3 billion from the $787 billion economic stimulus package.[26] According to White House officials the stimulus bill was estimated to create or save 41,000 jobs.[27]

According to preliminary reports Connecticut was expected to receive:[26][28][29]

  • $1.3 billion for health care costs
  • $84 million to modernize the unemployment insurance system
  • $29 million for worker retraining and employment services
  • $487.5 million for infrastructure projects
  • $302 million for rebuilding and improving roads and bridges
  • $137.5 million for transit formula funding
  • $36 million in public housing capital funds
  • $11 million in Community Development Block Grant funds
  • $19.7 million for the Drinking Water State Revolving Fund
  • $48.8 million for the Clean Water State Revolving Fund for clean water and waste water projects
  • $5 million for the Head Start program
  • $80 million in stabilization funds for public safety
  • $443.5 million in state stabilization funds for education

Budget transparency

See also: Evaluation of Connecticut state website

Connecticut currently had no statewide, official spending database online.

Economic stimulus transparency

Efforts to track spending of the American Recovery and Reinvestment Act had been difficult for the federal government, who were unable to account for the $8.3 million spent between December and March 2010.[30] Some of the funding was even spent in other states, like California, and one project sent money to Spain.[30] Overall, 9 programs had not reported their spending. Milford-based Gas Equipment Engineering Corporation, the largest grant of the non-reporters, received $1.2 million from the Department of Energy.[31]

  • The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.[32]
  • It was estimated that Connecticut would receive at least $1.8 billion in federal funding.[33] The state spent $125,000 of these funds promoting the spending and projects it created with it.[34]
  • Connecticut posted an economic recovery website.[35]

Four Connecitcut projects were noted in Senator Coburn and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. One project gives the Mohegan Tribe of Indians of Connecticut $54 million in rural development loans from the United States Department of Agriculture to construct a new four-story tribal government center, which would include both a new community center and a WNBA practice center.[36] Another project utilizes $184,650 of stimulus funds to refurbish what local media describe as “an old garage” into an art studio for artists participating in the Weir Farm’s “Artist-in- Residence” program. Whether there would be public access had not yet been determined in August 2010.[36]

Legislation

Main article: Connecticut transparency legislation
  • House Bill 5954[37] would establish a government transparency website to enable the public to track state spending and to promote transparency.
  • House Bill 5959[38] would require the Office of Policy and Management and the Office of Fiscal Analysis each post the state budget on their respective web sites.
  • House Bill 5962[39] would establish a searchable online database of state expenditures.
  • Senate Bill 340[40] seeks to enable easier public examination of all state contracts.
  • Senate Bill 521[41] would require full disclosure and transparency in state contracting.
  • Senate Bill 523[42] would establish a state website tracking the award of state grants and contracts.

These bills had been referred to the Joint Committee on Government Administration and Elections. Another transparency bill, HB 5097 which would provide online access to the state budget, had been referred to the Appropriations Committee.[43]

Government tools

The following table was helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary
None n/a n/a n/a n/a n/a n/a
  • The site was not searchable for spending items. Budget plans were not searchable.[44]
  • Grants were not posted.
  • Contracts were posted.[45]
  • Line item expenditures were not available.
  • Department budgets were not available.
  • Public employee salaries were not available.


Support for creation of the database

The National Taxpayers Union and Citizens Against Government Waste urged Connecticut's government officials to create a spending database.[46]


See also

External links

Additional Reading

References

  1. Business Week "Conn. gov unveils new plan to fill budget hole" April 29, 2010
  2. Cite error: Invalid <ref> tag; no text was provided for refs named falls
  3. The Hartford Courant "Balancing Acts: What Can Be Cut From State Spending?" Nov. 14, 2010
  4. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  5. 5.0 5.1 USA Spending, State Guesstimated* Government Spending
  6. The Wall Street Journal “States Face Budget Shortfalls of $26.7 Billion“ Dec. 8, 2010
  7. 7.0 7.1 The Hartford Courant "$237 Million State Surplus Attributed To 'Temporary Fixes'" Sept. 1, 2011
  8. The Hartford Courant "State Employees Reap $250M A Year In OT" Oct. 2, 2011
  9. Connecticutplus.com "Budget signed, some plan to challenge it in court, more join 2012 races" May 9, 2011
  10. The Connecticut Mirror "Unclaimed properties give state budget a holiday boost" Dec. 17, 2010
  11. 11.0 11.1 11.2 11.3 Gov Monitor "Connecticut Governor Signs Budget Agreement, Closes $700 Million Deficit" May 10, 2010
  12. TheDay.com "Outrageous budget assures grim days ahead" May 9, 2010
  13. Senate Bill 494
  14. New Mexico Watchdog, Debt in the Four Corners? We’re No. 1!, Aug. 3, 2010
  15. 15.0 15.1 The Connecticut Mirror "Congress passes aid bill vital to Connecticut's budget" Aug. 10, 2010&lt
  16. The Hartford Courant "State's Budget Surplus was Better Than First Projected; Sales Tax Increases Unexpectedly In Slow Economic Rebound" Aug. 3, 2010
  17. Connecticut Legislative Office of Fiscal Analysis, “Fiscal Note for H.B. 6802”
  18. 18.0 18.1 18.2 18.3 18.4 18.5 18.6 Connecticut Mirror Letter from Comptroller Wyman to Gov. Rell April 1, 2010
  19. Connecticut Mirror "Legislature's Democrats reach tentative agreement to balance 2010 budget" April 9, 2010
  20. Connecticut General Assembly, Office of Legislative Research, “OLR Major Acts,” November 12, 2009
  21. A Guide to Connecticut's State Budget
  22. NBCConnecticut.com "Malloy Signs 3 Executive Orders, Including on Rell E-Mails" Jan. 5, 2010
  23. Connecticut Auditors of Public Accounts Web site, accessed October 12, 2009
  24. audit reports
  25. California State Treasurer, “Comparison of Other States’ General Obligation Bond Ratings”
  26. 26.0 26.1 Waste or windfall? $787 billion in stimulus funding, October 03, 2010
  27. staterecovery.org, Connecticut
  28. The New London Times, "At the Capitol - awaiting the stimulus details," February 26,2009
  29. Norwalk Plus, "Funding for Connecticut announced in economic recovery plan," February 13,2009
  30. 30.0 30.1 Watchdog, Stimulus money in Connecticut overstated, some heads to Spain via UConn, July 22, 2010
  31. Watchdog, Nine stimulus grant recipients in Conn fail to report on spending $4.4 million, July 27, 2010
  32. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  33. Wall Street Journal, "Stimulus Spending by State"
  34. Watchdog, Connecticut spends $125,000 advertising stimulus funding, Sept. 14, 2010
  35. Connecticut Economic Recovery Website
  36. 36.0 36.1 "Summertime Blues, 100 stimulus projects that give taxpayers the blues" August 2010
  37. Text & Status of HB5954
  38. Text & Status of HB5959
  39. Text & Status of HB5962
  40. Text & Status of SB340
  41. Text & Status of SB521
  42. Text & Status of SB523
  43. HB 5097
  44. Governor Rell offers third budget proposal
  45. The Office of Labor Relations - Contracts
  46. National Taxpayers Union, "Taxpayers Support Creating Spending Database in Connecticut," April 11, 2007